The Growth of the Network Media Economy in Canada, 1984-2016

Publication

Publication

The report examines the state of competition in the mobile wireless market, internet access, broadcast, pay and streaming TV services, internet advertising, newspapers, browsers, online news sources, search, social media, operating systems, etc. in Canada over the period from 1984 until 2016. We call the sum-total of these media “the network media economy”. We then use two common metrics—Concentration Ratios and the Herfindahl-Hirschman Index (HHI)—to determine whether these markets—individually and collectively—are competitive or concentrated.

This year’s report adopts a new tack as well by taking a closer look at the state of competition in local and regional mobile wireless, retail internet access and “cable TV” services. We examine the state of mobile wireless competition in Quebec, Saskatchewan and Manitoba, for instance, where, at least in 2016, the big three national carriers—Rogers, Bell and Telus—faced strong regional rivals like Videotron, SaskTel and MTS (before the latter was taken over by Bell this year). We show that competition has improved considerably in Quebec, for example, where Videotron has carved out a 13% market share for itself in the mobile wireless market (and about 15% based on subscribers). Concentration levels are much higher in local retail internet access and cable TV markets, however, where the top two firms generally account for 88% and nearly 100% of the market, respectively. In short, there are strong reasons for concern in all these markets. Now is no time to let up on policy measures that have begun to bear at least some fruit, and perhaps good reason to double-down on them. We also identify features of the network media economy that set Canada apart from other countries. In Canada, telecoms companies, for instance, own all the main TV services except for the CBC and Netflix. This is a distinguishing feature of the network media economy and needs to be recognized and dealt with as such. Vertical integration in this country is very high by historical standards and almost four times current levels in the United States